1.A bond with a 4% coupon rate paid annually, a face value of $1,000, and ten years to maturity makes

A.		10 payments of $40 at 1 year intervals plus $1,000 received at the end of the tenth year.
B.		10 payments of $80 at 6 month intervals plus $1,000 received at the end of the tenth year.
C.		20 payments of $80 at 1 year intervals plus $1,000 received at the end of the 20th year.
D.		20 payments of $40 at 6 month intervals plus $1,000 received at the end of the tenth year.

2.What is the price of a bond with a 4% coupon rate paid annually, a face value of $1,000, and 10 years to maturity if prevailing interest rates on similar bonds is 7%?

C.		$1000
B.		$584.32
C.		$789.24
D.		$731.60

3.What is the current yield of a bond with a 4% coupon rate paid annually, a face value of $1,000, and 10 years to maturity if prevailing interest rates on similar bonds is 7%?

A.		5.1%
B.		6.2%
C.		5.5%
D.		7.3%

4.A bond with a 4% coupon rate paid annually, a face value of $1,000, and 10 years to maturity when prevailing interest rates on similar bonds is 7% is said to be trading at a

A.		spread.
B.		discount.
C.		premium.
D.		face value.

5.What is the price of a bond with a 4% coupon rate paid annually, a face value of $1,000, and 10 years to maturity if prevailing interest rates on similar bonds is 8%?

A.		$789.24
B.		$584.32
C.		$731.60
D.		$1000

6.What is the current yield of a bond with a 4% coupon rate paid annually, a face value of $1,000, and 10 years to maturity if prevailing interest rates on similar bonds is 8%?

	A.	5.1%
	B.	7.3%
	C.	5.5%
	D.	6.2%

7.A bond with a 4% coupon rate paid annually, a face value of $1,000, and 10 years to maturity when prevailing interest rates on similar bonds is 8% is said to be trading at a

	A.	premium.
	B.	discount.
	C.	face value.
	D.	spread.

8.When an investor purchases a bond, he or she

A.		receives accrued interest
B.		pays accrued interest
C.		receives accrued dividends
D.		pays accrued dividends